By YURI KAGEYAMA, AP Business Writer
TOKYO (AP) — Hong Kong’s benchmark stock index, the Hang Seng Index, rose 9% on Wednesday after a senior Chinese official said Beijing would provide more support for a slowing Chinese economy.
The rise was a respite from recent strong sales by Chinese tech companies and other pressures that had pushed the Hang Seng to six-year lows.
Officials at a Cabinet meeting in Beijing promised to “revitalize the economy” with “support measures” for struggling real estate and other steps, the official Xinhua news agency reported.
At the meeting led by Vice Premier Liu He, President Xi Jinping’s top economic adviser, cabinet officials called on government agencies to issue other “market-friendly” policies, Xinhua said.
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He also said talks between Chinese and US regulators to resolve a dispute over rules governing foreign companies listed on US markets had made progress.
The Hang Seng gained 9% to 20,079.61. The Shanghai Composite Index added 3.5% to 3,170.71.
Shares in e-commerce giant Alibaba Group Holding rose 23.6%. Tencent Holdings, operator of popular messaging service WeChat, jumped 23% and live streaming site Kuaishou Technology added 31.4%.
Several factors contributed to the meeting, including comments from Ukrainian President Volodymyr Zelenskyy that suggested there was still some reason to be optimistic the negotiations could still lead to a deal with the Russian government.
Russia, however, stepped up its bombardment of the Ukrainian capital and launched new assaults on the port city of Mariupol, making bloody gains on the ground on Wednesday as Zelenskyy prepared to make a direct request for more aid in a rare speech by a foreign leader. to US Congress.
Japan’s benchmark Nikkei 225 index rose 1.6% to close at 25,762.01. Australia’s S&P/ASX 200 added 1.1% to 7,175.20. South Korea’s Kospi gained 1.3% to 2,655.46.
At a policy meeting later on Wednesday, the Fed is expected to raise its key short-term rate by 0.25 percentage point. That would be the first increase since 2018, moving it away from its all-time low of near zero, and likely the start of a series of increases.
The Fed is trying to slow the economy enough to control the high inflation that affects the country and avoid triggering a recession.
Inflation is already at its highest level in generations, and the latest figures do not include the rise in oil prices after Russia invaded Ukraine. The move comes as central banks around the world prepare to pull the plug on support provided to the global economy after the pandemic.
“The allusion to ‘rearranging the deckchairs on the Titanic’ is not meant to invoke despair. Rather, it is meant to convey a sense of inevitability of the coming Fed tightening cycle,” said Tan Boon Heng of Mizuho Bank in Singapore.
On Wall Street, the S&P 500 gained 2.1% to 4,262.45. The Dow Jones Industrial Average gained 1.8% to 33,544.34, and the Nasdaq rose 2.9% to 12,948.62. The Russell 2000 index of smaller companies rose 1.4% to 1,968.97.
Renewed concerns about COVID-19 in some regions, in addition to a long list of other concerns, have caused wild hour-to-hour swings in markets in recent weeks. The war in Ukraine has raised the prices of oil, wheat and other basic products produced by the region. That raises the threat that already high inflation will persist and combine with a potentially stagnant economy.
US data released on Tuesday showed inflation was still very high at the wholesale level last month, but at least not accelerating. Producer prices were 10% higher in February from a year earlier, the same rate as in January. On a monthly basis, inflation increased 0.8% in February compared to January, compared to forecasts of 0.9%. That’s a slowdown from January’s 1.2% monthly increase.
Benchmark US crude fell early Tuesday but then stabilized. It earned $2.13 at $98.57 a barrel in electronic trading on the New York Mercantile Exchange.
A barrel of US crude fell 6.4% to settle at $96.44 on Monday. It had briefly topped $130 last week as concerns about supply disruptions due to the war in Ukraine were at their height.
Brent crude, the international price standard, added $2.89 to $102.80 a barrel.
Overnight, the suspension in fuel prices helped a wide variety of stocks. Airlines led the way after several raised their revenue forecasts for this quarter. American Airlines, Delta Air Lines and United Airlines soared 8% or more.
In other developments, nickel trading was due to resume Wednesday on the London Metal Exchange, just over a week after it was suspended as the metal’s price spiked above $100,000 a tonne.
Russia is the world’s third largest producer of nickel. Its price and that of many other commodities has surged on speculation about potential supply disruptions as Russia faces widening economic sanctions following its invasion of Ukraine.
In currency trading, the US dollar fell to 118.29 Japanese yen from 118.31 yen. The euro cost 1.0973 dollars, against 1.0955 dollars.
AP business reporter Joe McDonald in Beijing contributed.
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